Casinos face new money-laundering, compliance rules

High rollers know they are taking a risk anytime they sit down at a roulette wheel or craps table. But now the casinos themselves must be aware of the risks they are taking when these cash-only gamblers start throwing their money around.

The recent agreement between Las Vegas Sands and the federal government resulted in a $47 million price tag for the casino. The agreement represents the culmination of a two-year investigation into money laundering allegations surrounding a Chinese national who has been accused of being a drug kingpin.

In addition to the monetary penalty, the Sands will review its anti-money laundering policies and file reports with the government.

Due to the large amounts of money that flow through casinos, they are regulated like financial institutions and come under the purview of the U.S. Treasury’s Financial Crimes Enforcement Network. That organization is likely to craft new money-laundering rules for casinos eventually, but in the meantime it could issue guidelines requiring casino hosts to be more vigilant.

Several casinos, including the Sands, have already started their own initiatives to keep ahead of possible new rules. Sands will tie bonuses to employees that report suspicious transactions and pull back bonuses if issues arise. Caesars has expanded its own training and record keeping programs as well, according to The Wall Street Journal.

Casinos naturally wish to cater to the wishes of high rollers, who often transfer large sums of money to private accounts and spend a great deal of cash at the tables. But, in light of the recent incident, it will behoove them to take a careful look at their compliance with federal regulations, as to avoid these types of penalties and further entanglements.

Sands also found itself in hot water last year for allegations that it violated the Foreign Corrupt Practices Act, which prohibits the bribery of foreign officials.

Everyone knows that, at the tables at least, the odds favor the house. When it comes to playing against the federal government, the feds – like the dealer – have the advantage.

Senior Editor and Community Manager

Rich Steeves

Richard P. Steeves is Senior Editor and Community Manager of InsideCounsel magazine, where he covers the intellectual property and compliance beats. Rich earned a B.A....